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What fate awaits our pensions?

05.02.2018

Pension from the Social Insurance Agency will provide you with no high standard of pension or higher quality of life. A more secure option is to rely on your own strength and start saving while still in the productive age.

Main facts in 2017:

an average amount of the retirement pension was €427.20 in 2017

an average gross salary was €953 in 2017 (estimate by Tatra banka)

an average retirement pension represented 44.8% of an average salary

the assets of customers in Comfort lifeTB funds increased by €31 million

Comfort lifeTB 2050 had the best performance on the market with a return of 12.8%

Why do you need pension savingIt will be increasingly difficult to maintain or increase the current living standard when retired. “An average amount of the retirement pension was €427.20 in 2017 and an average gross salary was €953 in 2017 (estimate by Tatra banka). Thus an average retirement pension represented 44.8% of an average salary (the so-called replacement rate) and was lower by 0.8 p.p. year-on-year. Given the demographic development, gradual decrease of the replacement rate can be expected. We can also expect decrease in the merit component in the pillar 1. This means that people with an above-average salary will get retirement pension only slightly higher than those with an average or below-average salary,” says Juraj Valachy, Economic Analyst at Tatra banka.

Supplementary pension saving (Pillar III) is the most convenient form of saving for retirement pension. This is also documented by a recent significant increase in the clients’ interest in Pillar III. In 2017, the number of clients of Doplnková dôchodková spoločnosť Tatra banky (Tatra banka Supplementary Pension Asset Management Company - DDS TB) increased to 12,000 and the total number of its clients exceeded 200,000.

“Clients can be satisfied with the results of the investment strategy of Comfort lifeTB in 2017. Pension funds benefited from positive developments on financial markets and an overall increase of clients’ assets in Comfort lifeTB funds represented €31 million in 2017. The best performance on the market was achieved by the pension fund with the longest investment horizon, Comfort lifeTB 2050, which achieved a return of 12.8% in 2017,” adds Martin Ďuriančik, Vice-Chairman of the Management Board and CEO of DDS Tatra banky.

In the management of pension savings DDS TB respects the saver’s life cycle. Comfort lifeTB funds reflect the saver's age and the right Comfort lifeTB fund initially focuses on the highest possible appreciation of savings. Subsequently, before the client retires, the appreciated savings will automatically start to be gradually transferred to more conservative assets with low risk, in order to be protected at the right time against the impact of financial markets.

Marketing communication notice: Returns on investment of assets in a supplementary pension fund achieved in the past do not guarantee future performance. Saving in supplementary pension funds entails a degree of risk which depends on the specific investment strategy of the pension fund. The value of contributions to supplementary pension savings as well as returns from investing in the fund may rise or fall and the participant may not be able to get back the total amount of contributions made to supplementary pension savings. Official names of supplementary pension funds are: Doplnková dôchodková spoločnosť Tatra banky, a.s., Comfort life 2020 príspevkový d.d.f., Doplnková dôchodková spoločnosť Tatra banky, a.s., Comfort life 2030 príspevkový d.d.f., Doplnková dôchodková spoločnosť Tatra banky, a.s., Comfort life 2040 príspevkový d.d.f., Doplnková dôchodková spoločnosť Tatra banky, a.s., Comfort life 2050 príspevkový d.d.f.